Fundraising with Derivatives and Blockchain Technology
Justin Smith | CTO @ Elea Labs AG
Project: Optimize Quality and Transfer of Real Property Title
- Create open global standard for title transfer, improve liquidity
- Increase value of title by enriching it with data
- Improve title insurance; perfect chain of record and permanence
Sounds good! Let's finance it! But how?
What is a Token?
- Gross oversimplification: it's a term for an entry in a ledger
- A token represents something
- Requires trust in the issuer, legal system, and underlying tech
Why a Token?
- Trading is easy, use an app on your phone
- Minimal cost to store and trade
- Realtime execution and settlement
- Leave the perfect audit trail
- Can be easier to discover, e.g. where can I buy credit default swaps?
- Can fit into the existing legal system as a derivative
Why a derivative?
- Fewer rules about derivatives in general
- You can customize the benefits that are inhereited from the underlying
The token represents a participation right in the earnings of Example Company SA in the form of a derivative. The derivative will be represented on the Stellar network as a token, where it can be traded globally with real time settlement and at negligible cost.
The participation rights are based on the performance of Example Company SA and are paid to the persons being entitled to the tokens as Stellar Lumens (XLM) or any other form of compensation (fiat, other tokens, cryptocurrencies), at management’s discretion.
Creating a Fundraising Platform
- Security of data and funds raised
- Dividend and other rewards mechanisms
- Communication, such as distribution of annual reports to investors and receiving investor feedback
- Scalability (for public offers)
- Sale/end of life considerations
Cryptoasset Issuance System (CAIS)
- Perform compliance tasks (KYC/AML)
- Corporate controls (multisig)
- Manage refund orders
- Two factor Authentication for accounts
- Accept popular cryptocurrencies
- Data protected in Switzerland
- Take delivery via mobile app
- Trade P2P
- Use Stellar Lumens to exit the ecosystem
It's a decentralized stock exchange.